Category — Asia

"Burberry has benefited from globalization, and from its limitations too," reports the Economist (1/22/11). One benefit is that Burberry enjoyed a 27 percent revenue increase in the final quarter of 2010, much of it from a 68 percent increase in sales in Asia. Part of this growth is thanks to Burberry’s acquisition of 50 shops in China that previously belonged to franchisees. But it’s also because of "the rise of Asian rich," and the popularity of Burberry styles there.

The thing is that wealthy and trendy Asians might not have taken to Burberry’s had they been aware of its image back in Britain, where so-called "chavs" — "the stereotypical white working class delinquent looking for trouble" — took to wearing "Burberry baseball caps and jackets" featuring its trademark check pattern. Burberry successfully battled this trend in the UK by playing down the checks on its apparel and busting "vendors selling counterfeit versions of Burberry clothes at discount rates."

Meanwhile, in foreign markets, consumers "continued to see Burberry as the august outfit that clothed Ernest Shackleton for his Antarctic expedition nearly a century ago, not the favored label of a subculture they could barely comprehend. Modern economics and technology allows Chinese, Brazilian and American consumers to buy the wares of a London firm. But it has not made it that much easier to grasp the cultural nuances of another country." Lucky for Burberry, its Asian customers never really knew about chavs.

China is taking a “brute force” approach to innovation, setting a target of two million new patents annually by 2015, reports Steve Lohr in the New York Times (1/2/11). David J. Kappos of the U.S. Patent and Trademark Office says China’s goal is “mind-blowing.” In 2009, a total of 600,000 patents were filed in China, half of which were “utility-model patents” which generally are for “engineering features in a product” as opposed to full-scale “invention” patents. By comparison, the U.S. filed a total of 480,000 patents, but these were “invention” patents (the U.S. system does not offer utility patents).

“The leadership in China knows that innovation is its future, the key to higher living standards and long-term growth,” says David. “They are doing everything they can to drive innovation, and China’s patent strategy is part of that broader goal.” To achieve this, the Chinese government is offering incentives including “cash bonuses, better housing for individual filers and tax breaks for companies that are prolific patent producers.” However, some compare China’s “industrial policy” on patents to Japan’s in the 1980s, which was not entirely successful for various reasons.

In particular, “Japan never became a force in a particularly unruly, imaginative side of computing: writing software.” And the successes it did have are not necessarily linked to its industrial policy. Similarly, China is “emphasizing the quantity of innovation assets more than the quality,” says John Kao, an innovation consultant. John also suggests that the US could benefit from China’s patents by being the “systems integrator … of the innovation process. Look at Silicon Valley,” he says. “It is a place where smart people from all nations, all languages and all ethnic groups come together. It’s the capital of innovation assembly.”

Once Nguyen Phuong Hung is gone, Hanoi’s Blacksmith Street will likely disappear, like Fan Street, China Bowl Street and Conical Hat Street, reports Seth Mydans in the New York Times (11/25/10). When Mr. Hung was a child, Blacksmith Street "rang with the sounds of the smithies, producing farm equipment, horseshoes and hand tools." His father was a blacksmith and Mr. Hung took up the trade. "I still remember, when it was raining lightly, the streets were empty and … all you could hear was the sound of hammers," he says.

But now, at age 49, he’s the only blacksmith remaining (video); the others "left for lighter, better-paying work, and because word was out that no modern woman would marry a blacksmith." In fact, Mr. Hung’s own wife told him "she never would have married him if she had known he would become a blacksmith." So, he makes sure he’s all cleaned and scrubbed by the time he gets home. "I’m proud to be the last one," says Mr. Hung, but admits that once he’s gone, "the street will have no meaning anymore."

As the last blacksmith standing, he’s doing better than ever — but ironically his main source of work come from "people who tear down, rebuild and renovate the buildings" in his neighborhood, known as the Ancient Quarter. The area has been a center of business since the ninth century, and at the turn of the 19th century, 36 guilds were established on "36 narrow streets." Mr. Hung seems determined to hang in there, quoting his father, who told him, "When the iron glows red, you earn your money. That is your life."

Long derided as sugary schlock, Koshu wine from Japan is being reinvented for the world market, reports Corie Brown in the New York Times (10/27/10). Koshu has been around for about 150 years, and it has a bad reputation because traditionally it’s been made with "damaged and rotten" fruit, rendered somewhat palatable with heavy doses of sugar. But an American enthusiast, wine importer Ernest Singer, sees potential for Koshu as a dry wine that can be "light and crisp with subtle citrus flavors."

In fact, Ernest thinks that Koshu is "a match for Japan’s cuisine." He’s been on the Koshu trail for nearly a decade now, working with "a clutch of family-owned Japanese wineries … under the banner Koshu of Japan." Among them is Shigekazu Misawa of Grace Wine, which had been making bad Koshu for generations. "Koshu is two-thirds of all we make," he says. "And we needed to make it better." Changes include planting the vines differently (in rows, not canopies) and "getting rid of the grape’s bitter skin early in the process." And no added sugar.

The result, so far, is a simple, bone-dry wine, with low alcohol content. One Koshu, a 2004 vintage made at Grace Winery, went over well with Robert M. Parker Jr., the wine critic, who "gave it a score of 87/88 on a scale of 100." But the wine has yet to go over big in Japan, where "wine drinkers are slow to believe that they are worth their price tags of $20 and up." Koshu is an even tougher sell in the US, where it is not yet readily available, but can cost $50 a bottle at restaurants. Ernest Singer remains optimistic, however: "I’ve been in Japan for 50 years," he says, adding, "this movement is going to blossom."

Mashup offers new brand opportunities in China. By Michael Ip. (more)

"You don’t just grow a chicken, you form a relationship," says Dennis Mao in a New York Times article by Jennifer Steinhauer (4/21/10). The relationship in question is with so-called Jidori-style chickens, a type of chicken first raised in Japan, and now popular in Los Angeles. The relationship involves feeding the chickens vegetarian diets with no antibiotics and letting them roam free before killing them, cleaning them by hand, chilling them in ice water and delivering them to chefs, with the head and feet still attached, within 24 hours of slaughter.

Chefs prize these birds, said to have a "super-fowl flavor." They are leaner than the usual chicken with only about two percent water retention, versus the ten percent allowed by law. Dennis began raising Jidori-style chickens in 1995. "I just knew this was something important," he says. "Chicken was always a cheap protein, but we decided to give them the respect they deserve." At first, his only customers were Japanese chefs, who were familiar with Jidori chickens from back home.

Dennis’s break came when Wolfgang Puck began using his chickens, and today his Jidori chicken "has such cachet in Los Angeles that even chefs who don’t have any sometimes claim it on their menus." In fact, even Dennis’s Jidoris aren’t truly authentic — only chickens raised in Jidori, Japan, can make that claim. But Dennis’s business is growing, having expanded into a restaurant, Robata-Ya, where, among other things, "he serves up … raw chicken-liver sashimi … braised coxcombs and grilled chicken hearts with the aortas still attached."

"In the end, kids are the same all over the world. They see an ice cream truck, they come running," says Alex Conway in a New York Times piece by Vincent M. Mallozzi (4/15/10). Alex would know: His grandfather, James Conway, helped start the Mr. Softee franchise, selling soft-serve ice cream from trucks, back in 1956. The trucks are still going strong "in Washington Heights, Coney Island and neighborhoods in between," although they’re no longer permitted by law to ring their bells while they’re parked.

Ironically, that’s the only time they are permitted to ring their bells in China, where Mr. Softee is globalizing with five trucks in Suzhou, "an ancient city of more than six million people about 50 miles west of Shanghai … and one in a nearby city, Taicang." The idea of Mr. Softee in China occurred when Alex’s former college roommate, Turner Sparks, noticed that, despite "a deluge of American fast food franchises" there was nothing like Mister Softee. In fact nobody was selling anything at all out of trucks.

So, Alex filled out lots of forms and brought his cone-headed logo to China, under the name "Ruan Xin Xian Sheng," which translates into Mr. Soft Heart "because there is no Mandarin word for Softee." He also adjusted flavors to include kiwi and red bean blast, "a rice-cake-flavored ice cream covered with red beans and topped with whipped cream." That’s one of Mr. Soft Heart’s biggest sellers — and sales have doubled "every year since the first truck started rolling three years ago." Alex now plans to expand to Hangzhou and Wuxi.

Olivier Francois, Chrysler’s brand chief, is bringing back "models wearing metallic minidresses" to automotive marketing, reports David Welch in Bloomberg BusinessWeek (3/15/10). "I am doing here what I know from [home]," says Olivier, whose home is France and claim to fame is Fiat’s recent success in Italy. His goal is "to attract a younger, hipper, wealthier customer as Chrysler’s traditional buyers age and dwindle in number." To accomplish this, he’s not afraid to court some controversy, as well as "generate new heat around the brand’s muscle cars."

During the SuperBowl, for example, he ran a "slyly sexist commercial for the Dodge Charger" called "Man’s Last Stand." The spot "featured closeups of regular guys saying: ‘I will shave. I will carry your lip balm. I will put the seat down." And then the voiceover, as a Charger speeds away adds, "Because I do this, I will drive the car I want to drive." The spot did create buzz, including a great YouTube spoof done from a woman’s perspective: "I will put my career on hold to raise your children. I will diet, botox, and wax everything …" (video)

Whether that kind of buzz translates into sales remains to be seen, obviously. Olivier also says he’s on the lookout for cars that "people want to make out in." This would be a switch "for an automaker best known for the Town & Country minivan." And it may not help attract more women to, say, Dodge, whose buyers are three-quarters male — or soccer moms and dads, for that matter. Industry analyst John Wolkonowicz is among those doubting that what worked in Italy for Fiat will work for Chrysler in America. "Americans don’t have that kind of loyalty," he says.

"Pearls embody how humans can trick Mother Nature into producing some of the world’s most expensive objects," writes Stephen G. Bloom in "Tears of Mermaids," as reviewed by Joseph Sternberg in the Wall Street Journal (12/28/09). "A perfect natural pearl of extraordinary quality may be the product of one out of ten million oysters," Stephen explains. This, of course, is the reason pearls are so expensive, and until the late 1800s, only the very wealthy could afford them.

That began to change in 1888, when "Kokichi Mikimoto, the son of a poor noodle-maker in Japan, started a pearl farm that would eventually democratize the world pearl market. By the first decade of the 20th century, Mikimoto had perfected a technique for cultivating pearls, inserting a nucleus of North American mussel shell into an oyster that would then produce a pearl in as little as two years … Cultured Japanese pearls took America by storm in the 1940s and ’50s when homeward- bound GIs bought them for their wives and girlfriends."

It was kind of a no-brainer, since pearls, essentially, are just "accumulations of concentric layers of nacre, a compound of calcium carbonate that some mollusks … produce to line the insides of their shells." But pearls also form a kind of "aesthetic rapport … with their wearers, absorbing body heat and seeming to glow and reflect luminescence onto the skin." Today, Chinese entrepreneurs "have found ways to culture pearls in a species of mollusk that can produce more pearls per bivalve than the typical oyster," making pearls "cheaper and available in more varied colors" to more people than ever.

"Vietnam is one of the most exciting beer markets in the world today," says Walter Bocker in a Wall Street Journal piece by James Hookway (9/15/09). Walter is with Gannon Group, which is "Anheuser-Busch’s Vietnam-based partner." He is joined in his enthusiasm by Carlsberg, Heineken and SAB Miller, each of which has a joint-venture going in Vietnam. Collectively, these foreign brewers have put Vietnam’s state-run beer enterprises on the run, but not for long, perhaps. Never underestimate the potential of socialized beer.

Local, "state-invested Vietnamese brewers," such as "Hanoi-based Habeco and Ho Chi Minh City’s Sabeco are readying themselves for a fight." Their strategy centers on providing something the imports do not — specifically a local specialty called "bia hoi, which translates as ‘fresh beer,’ a relatively low-alcohol, bitter brew with a shelf life of a few days that makes up 30 percent of the beer market" in Vietnam. Bia hoi costs "about a third the price of an international brand," and first became popular during the U.S. Vietnam war, when there wasn’t enough glass to make bottles.

To this day, Bia hoi is "sold only in kegs, delivered early each morning to hundreds of side-street restaurants in Hanoi. By lunchtime, people are tossing back chipped-glass-tumblers of the beer while munching dried squid, fried tofu and other snacks." Habeco, founded in 1890 by French colonials, has seen its sales double between 2004 and 2007. Sabeco’s sales have increased to 900 million litres from 500 million between 2006 and 2008. However, foreign brewers see in bia hoi only a quagmire of "low margins and different route-to-market characteristics," and plan to continue to rely on "deep pockets" and traditional marketing techniques.